Which of the Following Statements Is True of Franchising

question 5

Multiple Choice

Which of the following statements is true of franchising?

• A) It offers the highest risk and requires the least investment but also has the highest potential return on investment.
• B) It offers the lowest risk and requires the least investment but also has the lowest potential return on investment.
• C) It offers the lowest risk and requires the most investment but also has the highest potential return on investment.
• D) It offers the highest risk and requires the most investment but also has the highest potential return on investment.
• E) It offers the highest risk and requires the most investment but also has the lowest potential return on investment.

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Definitions:

Hazardous Jobs

Occupations that pose significant risks of injury, illness, or death as a result of the work environment or tasks involved.

Moral Hazard

A situation where one party is more likely to take risks because the consequences of their actions are partly borne by others.

Straight Salary

A fixed amount of pay given to an employee, not dependent on the hours worked or performance.

Over Insure

The condition of having insurance coverage that exceeds the value of the insured item or risk, leading to unnecessary higher premium costs.